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Perlegen Scuttles IPO Plan on Advice to Wait for Results of 'Important' Genetic Studies

NEW YORK (GenomeWeb News) — Perlegen Sciences has withdrawn its plans for an initial public offering, according to a letter the company sent to the US Securities and Exchange Commission on Monday.
Perlegen, a subsidiary of Affymetrix, separately said it has named former Chiron official Bryan Walser interim-CEO.
In his April 30 SEC letter, Affy CEO Stephen Fodor said Perlegen’s board last May “determined not to proceed with the offering” after its lead underwriters advised the company to wait for “the outcome of certain genetic studies in connection with an important, ongoing research initiative.”
Perlegen filed for an IPO last April, saying it hoped to raise as much as $115 million.
In Monday’s letter, Fodor wrote that “coincidentally” with the board’s decision to scuttle the IPO, the company’s audit committee found that in 2005 Perlegen had billed the federal government around $1.3 million for costs related to a contract “that were not properly recoverable.”
Fodor said the company credited those costs back to the government, and that the audit committee had advised Perlegen it must “strengthen controls related to government contracting activities, as well as the company’s overall internal control and compliance environment.”
These changes would include “changes in financial reporting management, structure and personnel” of Perlegen, Fodor added.  
Fodor's letter can be found here.
Fodor, who is also chairman of Perlegen’s board, said in a statement today that Bryan Walser will take over management for the company’s operations and its organizational development, and will work on “honing  Perlegen’s strategic mission.”
Walser had previously worked as vice president of strategy and corporate affairs at Chiron. "While our board envisioned expanding the senior team with the recruitment of a new CEO and was in the process of starting a formal search, the chance to bring Dr. Walser into the company presented itself, and we decided to take advantage of the opportunity,” Fodor said in the statement.
Fodor added that the hunt for a new CEO will continue but that Walser “remains a candidate” for the permanent CEO position.